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Where Have All the Asian Tigers Gone?

There is no magic bullet that can ensure emerging Asian economies actually emerge and live up to their huge promise. But, given the marked economic slowdown that hit key countries well before the pandemic, a radical reconsideration of capital-account management would be a good place to start.

NEW DELHI – This was supposed to be the Asian century, with the ascent of China being only one – albeit a major – part of the story. The rest of it was going to be about other rising regional stars: potentially huge economies like India, rapidly industrializing upper-middle-income countries such as Malaysia, strategically significant exporters of minerals and other raw materials like Indonesia, and some relatively new kids on the block, including Vietnam and Bangladesh.

Many regarded Asia as the world’s most dynamic region, one with relatively favorable demographics and potential for economic diversification, while China’s increasingly gargantuan economy and evolving supply chains would inevitably pull along much of the region. China’s own external trade and foreign investment plans strengthened this belief. The country would provide substantial foreign aid, direct investment, and loans from institutions like the China Development Bank and the Export-Import Bank of China, and then in a supposedly more structured way through the Belt and Road Initiative. These efforts would develop transportation and energy infrastructure and provide logistical support for enhanced region and global trade. And agreements like the 15-country Regional Comprehensive Economic Partnership would later advance the rise of a formidable economic bloc.

This, at least, was the widespread perception at the start of the 2010s, reinforced by the relatively rapid recovery of most of the region from the 2008 global financial crisis. But a lot changed over the past decade. The West’s obsession with China and the perceived threat of that country’s rise mean that G7 leaders (and most Western commentators) have not looked in much detail at other Asian emerging markets. Had they done so, they would have observed that some of them were experiencing a more troubling trajectory.

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